Redman

Leverage 101: The Real Cause of the Financial Crisis

While I partially agree with this "lesson in leverage"..the fact that the Fed (Alan Greenspan & Co.) allowed rates to stay at 1% for too long. This opened up the door for a classic period of speculation by the so-called 'fast money' players who borrowed cheap and invested in anything that moved..real estate included.
I mean..how dumb was that? What were they thinking? If you can borrow at 1+% (more or less) and use that money to leverage yourself..you don't need to be Fellini to figure out that sooner or later the bubble will burst..aka..today's problems.
If the bankers who packaged these "products" can't price them..why does anybody think the geniuses in D.C. will be any better?!
In my humble opinion...let nature take it's course, so to speak, let the govt. pay as little as possible (with some form of guarantee) and let the institutions pay the price for their actions. Sure, there will be pain..but let Wall St. feel what everybody else is feeling for a change!